The Indiana House of Representatives on Tuesday passed State Rep. Sharon Negele's (R-Attica) legislation boosting transparency in the property tax assessment process for when a wind farm changes ownership.
More specifically, Negele said this bill would create stability in the valuation of business personal property tax on wind turbines when there is an ownership change. Currently, the county is responsible for assessing the property under the turbine, but the wind turbines are valued by the owner and reported annually to the Department of Local Government Finance. Negele said a formula is used to determine a depreciation schedule of the property for federal tax deduction purposes.
When a wind farm is purchased, Negele said the federal depreciation schedule could be updated to include new federal incentives, which can cause a drastic reduction in value resulting in a much lower assessed value. For example, Negele said a Benton County wind farm was valued at $169 million one year and after changing ownership, it was valued at $8 million the following year. Negele said this wild drop in value happened despite no changes to the property or power generation.
"An unexpected and drastic drop in value of this property type could have many negative effects, including potentially shifting a significant tax burden to other property owners often located in sparsely populated rural areas," Negele said. "Under this bill, we can bring stability to this process and prevent situations like what happened in Benton County from happening again."
Negele's legislation would require that when ownership changes, the previous year's property valuation is used for one year and the DLGF must receive a timely notice of the sale. After that, owners would be required to use DLGF's depreciation schedule. The bill also requires valuation information to be reported to the legislature so that a legislative study committee could further examine the issue.
"This summer, I hope to do a deep dive into how we value these turbines, the assessed valuation process and how other states handle it," Negele said. "The goal is create stability in these valuations when there are huge swings, which can really impact Hoosier taxpayers suddenly and drastically."
HB 1401 now advances to the Indiana Senate for consideration. To learn more and follow legislative proceedings, visit iga.in.gov.
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State Rep. Sharon Negele (R-Attica) represents House District 13,
which includes all of Benton and Warren counties, and portions of Fountain, Jasper, Montgomery, Newton, Tippecanoe and White counties.
Click here to download a high-resolution photo.
